In 2017, Pennsylvania enacted Act 43 of 2017 which imposed a withholding requirement on payors of Pennsylvania-source income to certain nonresidents. The law and lack of initial guidance resulted in confusion and many questions for businesses attempting to implement the required withholding. The Pennsylvania Department of Revenue has been addressing taxpayer concerns individually, and with lobbyists and has now launched a new website with information on the nonresident withholding requirements.
The website includes an explanation of the law and its requirements on payors and includes:
- The definition of Pennsylvania-source income and recommendations for determining the source income amount when income is attributable to activity inside and outside Pennsylvania;
- Commonly used terms in the non-resident withholding law;
- Frequently asked questions; and
- A link to the 1099-MISC withholding exemption certificate.
The Pennsylvania Nonresident Withholding webpage may be found at here.
Please contact our State and Local Tax team if you have any questions concerning your nonresident withholding responsibilities.